When Governor John Kasich rolled out his “Jobs Budget” (HB 153), no one was surprised that this champion of all things “free market” called for the acceleration of the privatization of public education in Ohio via the repeal of the 2005 moratorium that prohibited the opening of new on-line schools in the state.

But — surprise, surprise — the Republican dominated Assembly rejected Kasich’s proposal and voted to keep the moratorium in place. Wow, at first glance, it looked like the legislature was responding to the dismal academic failure of Ohio’s current e-schools, and, amazingly, that Republican Assembly members, tempering their free market mania, were acting to protect the public interest.

Not so — says Innovation Ohio. This think tank has published a report “OHIO’S E-SCHOOLS: FUNDING FAILURE; CODDLING CONTRIBUTORS,” that says the Assembly’s refusal to allow the opening of new e-schools, in fact, was a pay back to e-school owners from Republicans demonstrating their gratitude to their big political donors. E-schools are hugely profitable and, naturally, e-school owners don’t want additional competition, so they pressed their Republican “friends” to keep the moratorium in place. From the report:

“Innovation Ohio has found that between 2001 and 2010, Ohio Republicans, who now control both the Governor’s office and the Ohio General Assembly, received nearly $4 million in campaign contributions from just two men – David Brennan and William Lager.

David Brennan, who operates more charter schools in Ohio than anyone else, has single- handedly donated nearly $3 million to state candidates and Republican Party accounts. Brennan operates the Alternative Education Academy E-School (OHDELA), as well as several brick-and-mortar charter schools. Though OHDELA graduates just 35.9 percent of its students, Brennan receives $11.7 million a year in state money to operate it.

Incredibly, Mr. Brennan—who currently rakes in roughly $100 million per year from the state, and has banked over $500 million in state money since 2000—has never once testified before any education committee of the Ohio General Assembly.

For his part, Mr. Lager, who operates ECOT, has made nearly $1 million in political contributions since 2001. ECOT receives $64 million per year in state money – yet graduates just 35 percent of its students, and has a performance index rating worse than all but 14 of Ohio’s 613 districts. …

(By keeping the moratorium in place that stops the formation of new Ohio e-schools,) far better for these Republican benefactors to maintain their gravy train, especially since the adoption of standards is nowhere in sight. Coupled with the repeal of E-school reporting and minimum spending on student requirements, Brennan and Lager now can enjoy the best of both worlds—no pesky competition to eat into their market share, no standards for the schools they already operate, and no risk of state- imposed fines to cut into their profits.”

The New York Times last December reported, “Profits and Questions at Online Charter Schools,” that one Ohio School, Ohio Virtual Academy, receiving more than $60 million a year from the state, is managed by a national company called “K-12.” Astoundingly, the CEO of K-12, Ronald J. Packard, receives an annual salary of $5 million.

The NYT reports: “In an interview at K12’s headquarters in Herndon, Va., Mr. Packard said, ‘We’re here to help children, and that is our overriding purpose and we want to do it as well and efficiently as possible.’ ” I had to laugh when I read Mr. Packard’s “It’s all about the children” defense. I guess it’s nice to have your good deeds rewarded with a $5 million paycheck each year, as well.

Innovation Ohio doesn’t report the salaries of Lager or Brennan, but, I’m sure they are huge. Do the math:

E-schools receive $6,320 tax money per pupil — subtracted from funds that otherwise would go to local public schools — and the reported average student: teacher ratio for Ohio e-schools is 37:1. (I suspect it is much higher.) The average salary for teachers in Ohio e-schools is $36,000 and with retirement and health benefits the average total compensation per teacher would be much less than $50,000.

The largest Ohio e-school is ECOT with 9257 students. On the expense side, if the 37:1 ratio is accurate, ECOT has 250 teachers with total compensation each year of $12,500,000, round to $13 million. Add computer equipment, software, on-line expenses, etc cost, I’m guessing, on average, $1500 per student each year for $14 million Add a generous amount for administrative and office costs, for another $5 million. And the TOTAL is $13 + 14 + 5 = $32 million

On the revenue side, @6320 per student, there is an income of $58 million, and, so, there seems to be an excess of $58 – $32 = $26 million.

If I’m off in my expense side by $10 million, there is still plenty of excess money to pass around. One big e-school expense I’ve not noted is advertising — e-schools spend a lot of public tax money soliciting new students. And, of course, donations from e-school owners given to politicians is also an indirect expense. Here is how the gravy train chugs along, ever faster:

From 2001-2010, David Brennan alone made political contributions totaling $2,933,046 to political party accounts and candidates for statewide and legislative offices, with only token amounts going to Democrats. William Lager donated $943,452 during that same time frame –again mostly to Republican candidates and causes. What is especially noteworthy is the size of their recent largesse, especially since it is Republicans who are now seeking to remove all caps, restrictions and accountability from E-schools and charter schools more broadly.

As the 2010 elections approached, Mr. Brennan stepped up his contributions to statewide Republican candidates, giving generously to the campaigns of Gov. John Kasich ($22,781); Secretary of State Jon Husted ($22,745); Treasurer Josh Mandel ($22,692); Auditor David Yost ($11,000); Attorney General Mike DeWine ($11,000) and Speaker of the House William Batchelder ($22,000). xxi Their Democratic opponents received nothing from Mr. Brennan.

Mr. Brennan also contributed heavily to various Republican Party organizations and committees during 2009-10. In 2009, he gave a total of $169,075 to 5 different GOP political funds, and in 2010, $106,000 more to 3 Republican funds and committees. He also contributed an additional $24,850 to Republicans in 2009-10 through “Go-Go PAC”, a political action committee that he himself controls. xxii Go-Go PAC’s contributions to Democrats during this period totaled $9,420, with the bulk of that ($8,395) going to incumbent Gov. Ted Strickland.

All told, David Brennan lavished over $412,000 on Republican candidates and committees during 2009 and 2010 alone, while contributing a token $9,420 to Democrats in this period.

Although not as generous as Mr. Brennan, William Lager also targeted Republican candidates in 2009-10, giving Batchelder $21,000; Yost $11,395; and Senate President Tom Niehaus $11,000. Two Democrats—then-House Speaker Armond Budish and Rep. Ted Celeste of Columbus—received $10,000 each. xxiiiLike Brennan, Mr. Lager also gave significant amounts to party organizations in 2009-10, with Republican committees receiving $86,093 and Democratic committees getting $42,000.

If the idea is to offer school choice through e-schools, the republicans shouldn’t be picking winners or losers through legislation, as you describe, by limiting competition to those with political connections. Offer e-schools and compete, or don’t.

In this case, it looks like they are picking losers due to the graduation rate. However, I can’t help but wonder what the graduation rate of those students would be if they had to graduate in the public school systems. Brick and morter charters seem to attract bright students (or so unions say) and e-schools generally attract those who don’t play well with others.

While reading the article, I couldn’t help but think this article could be entirely rewritten substituting the words democrat for republicans, unions for private sector, public schools for private schools, and union boss for CEO.

Just to see how that works out, lets try it.

You say:
And, of course, donations from e-school owners given to politicians is also an indirect expense. Here is how the gravy train chugs along, ever faster:

Money extracted from taxpayers
is cleansed by “private enterprise”
then placed to politicians’ hands
so politicians can enact policies
to empower “private enterprise” to extract more taxpayer money so
even more money is placed in politicians hands so
“private enterprise” can extract even more money ….

It could be rewritten to read:

And, of course, mandatory employee contributions from public union employees given to politicians is also an indirect expense. Here is how the gravy train chugs along, ever faster:

Money extracted from taxpayers
is cleansed by “public unions”
then placed to politicians’ hands
so politicians can enact policies
to empower “public unions” to extract more taxpayer money so
even more money is placed in politicians hands so
“public unions” can extract even more money ….

I would expect your next article to focus on public union contributions to democrats who oppose implementing many of the organizational and educational reforms trumpeted here. (many of which I support)

Bryan, I agree that students who are self-selecting to attend e-schools are exactly those students who are the least likely to be successful in such a setting. But, the fact that these same students are the ones least likely to graduate from a traditional brick and morter school, does not mean it is good public policy to fund alternative programs for these students run by charlatans.

As a society, we need to take a long step back and think through what we are attempting with our whole system of public education. If, in general, the justification for coercive taxation is the advancement of the common good, then what is the justification for taxation to support public education?

The cost of a K-12 education, in many districts, exceeds $150,000. We need to have some honest debate as to what is the expenditure of this tax money seeking to accomplish? An honest look at the big picture reveals that we need to clarify the aim of public education and then we must transform the present system to align with that aim. Transformation requires a shared vision of purpose and requires a long term plan. My idea of writing a book entitled,“Kettering Public Education In The Year 2030″ is to suggest a big idea of how we should define the aim of resources we now currently expend on our current system of “public education,” and what a system might look like that would have the best chance of accomplishing that aim.

Mike,
Your response used quite a few electrons to not say much of anything not already repeated elsewhere on your site.

Based on your response, I’m left wondering exactly what the main point of your article was. Was it to voice your displeasure with the republicans picking winners and losers as it relates to e-school operators or to exhibit your distaste for e-schools themselves?

The main point of my post was to 1) agree that picking winning and losers through legislation is wrong and 2) that when it comes to education, doing so isn’t just isolated to the republican party.

Your response was: I agree there are various compartments on the American gravy train.

It’s good to see we agree on something, but would you care to elaborate on what these various compartments are?

What are these other compartments doing within the public education system to continue their own version of a gravy train?

Based on your skills to perform thoroughly research and then document findings, I think you would do an excellent job at providing your readers with some data and insight into these other gravy train compartments.

Will you research and write an article that details any connections that may (or may not) exist between the operators of public schools and state legislators?

Bryan, my main motivation in making this post is to report the truth. The facts in this article give some valuable insight and so I wanted to record them into this web log.

The “operators of public schools,” theoretically, are the citizens in a local community, who, in our system of representative democracy, elect school boards. And so, local school boards, legally, are the “operators of public schools.” These operators set policies, create a budget, etc. — and lobby state legislators.

The problem with our system of representative democracy, at every level of government, is that “special interests,” — those who personally have the most at stake — are those who are most vigilant, most aggressive, in electing representative who will advance and protect their personal interests. And so, at every level, we have representatives who are not focused on promoting the general good, but are focused on promoting the good of their true constituency — the very small group that engineered their election. One constituency that the state Assembly coddles are the owners of e-schools. And local school boards also coddle their core constituency — the group who got them elected — those who have the biggest stake in maintaining and advancing the status quo: the teachers’ and school workers’ unions and parents of kids in the system.

Bryan, I disagree with your notion that public school unions are “(the real operators of public schools.” This notion is no more true than a claim that the owners of e-schools are the real operators of the state Assembly. The fact that e-school owners make big political contributions means they are are coddled by the Assembly — given unfair advantage — but it would be a very overblown statement to suppose those contributions are sufficient to make them the operators of the Assembly.

Public school unions have the most influence at the local level, because, often, they, in effect, choose the local school board members. But, increasingly, the control of local schools has been removed from local communities and has been centralized in Columbus. Public school unions, for example, would never have designed the current system of testing and school evaluation — these were all policies imposed by the state legislature, Republican dominated.

In past history, maybe Ohio teachers’ unions might have had clout in the Ohio Assembly, during those infrequent times when their contributions and efforts helped elect Democrats. But, that is not the case now. Maybe there is an article to write showing how teacher union contributions influenced, in some distant past, Ohio public policy, but, I doubt there is much parallel between that past teacher union influence, and to the policy payback that it may have engendered, and the influence on the Assembly of current e-school owners and the outright cash payback these e-school owners have received. A change in policy responding to a union POV is of quite different character from a change in policy that puts cash directly in the hands of a few wealthy e-school owners. So, I don’t think you have much of a point by suggesting there is some equivalency in the evil perpetrated by the two. But, if you suggest something specific you think is worthwhile researching, I’ll look into the matter.

Maybe there is an article to write showing how teacher union contributions influenced, in some distant past, Ohio public policy

HB-1 is not the “distant past.” Ohio’s D-rated American History academic content standards are an example of actual recent influence. Here’s an example of superfluous content from the earlier standards (adopted in response to Ohio’s Supreme Court):

3. Explain how an individual participates in primary and general elections including:
a. Registering to vote;
b. Identifying the major duties, responsibilities and qualifications required for a particular position;
c. Becoming informed about candidates and issues;
d. Declaring or changing party affiliation;
e. Obtaining, marking and depositing a ballot